Richard Koch, Elders

Richard Koch is an economist working with Elders. His regional cattle markets wrap follows a weekly hook-up with Elders livestock managers across the country.

ANOTHER big week in livestock markets with the official triggering of the China safeguard and the first of the new season sucker lambs hitting the market.

Both the beef and sheepmeat markets are about to see significant changes in dynamics – beef on the demand side and sheepmeat on the supply side.

From a seasonal conditions perspective speaking with agents across Australia there are few weak patches – we are enjoying the best general seasonal conditions at least since I started with Elders in March 2024. True to form I’m heading to Orange for the weekend to watch a mate’s son play rugby and they are expecting the coldest day of the year. But as Scottie Altschwager from the lower SE of SA keeps saying winter has been like a second Spring so far. Livestock are packing the weight on in mild conditions.

Weather

Good rain for most if WA/SA & VIC setting up most areas in these states for a ripping Spring.

Forecast

The 8-day looks promising. It’s too late and not enough to influence plantings west of Moree but it will help give a kick along to crops that have been planted across nth NSW and sth QLD.

International news

• Australia has officially triggered its China TRQ
• Note we are 90% against our Korean safeguard which would ratchet tariffs to 24% – we have never triggered so early. Unlikely that a waiver will be granted. Australian exporters face tightening demand conditions in Asia accord to Junie Lin Expana Asia-Pacific expert
• Imported beef prices in the US continued to lose ground on ample supply offered from both Oceania (mostly Australia) and South America (mostly Brazil) and more volume available from Central America and Mexico. Update
• The spread between frozen imported Aust/NZ 90CL vs domestic fresh 90CL was near 80c/lb and 118USc/lb for Brazilian product last week – the highest on record from 2000-2026.
• This metric is closely watched by US grinding sector as it affects blending decisions, influences forward contract strategy, and import demand.
• Shipments from Australia to the US are currently on pace to approach 50,000t for June. This would be a new record and some 40% higher than a year ago.
• With more imported beef expected to be available later in the summer, US buyers have more leverage, especially with Quick Serve Restaurants (QSR) sales not performing to the degree expected and thus leaving buyers with a bit more inventory on hand than expected.
• Brazil is facing challenging conditions in other key export markets as China buying slows (fears of triggering TRQ, seasonal buying slowdown), difficult ME logistics, EU excluding Brazilian origin products from Sept 3 due to non-compliance with antimicrobial-use requirements and Mexico imposing a 70,000t TRQ.

Brazil beef exports increased 4% month-on-month (mom) to 262,000t in May.

• 154,000t to China (+13.5% mom)
• 26,000t to US (-32% mom), maybe due to focus on China
• 12,000t Russia (+143% mom), possible alternative outlet for large volumes after China’s TRQ is triggered
• 18,000t to MENA (-4% mom). But exports to MENA are down 20% year-on-year as logistics become a bottleneck with alternate routes having difficulties handling higher volumes.
• 8,000t to Chile (-17% mom)
• 6,000t to Mexico (-9% mom)
• 6,000t to Philippines
• 3,000t to Argentina (+110% mom) growth reflecting Argentina’s strategy of importing Brazilian beef for its domestic market and maximising export revenues from higher value cuts to premium global markets.

China will officially announce when Brazil gets to 80% of is TRQ of 1.2mt. So, announcement at 960,000t which at 150kt/mth would give us about a month’s warning that China will effectively close to Brazilian beef. Expect a market reaction to news that Brazil has reached 80% into China

Livestock markets

Prices continue to strengthen albeit at a moderating rate

General market info

• Angus feeders that left the NE to go to QLD are just starting to run
• Supported by buying to fill feedlots to target China re-opening
• Prices should top out at $6-6.50/kg
• Heifer discount starting to really squeeze in as restocker start to tap this market

• The first new season lambs have bit the market with one agent presenting over 1,000 light weight new season sucker lambs at Wagga on Thursday. Apparently, the consignment came from Cootamundra and were February drop lambs that averaged 31kgs for $210/head, valuing them at $7/kg lw. This highlights what will be a significant change in the sheepmeat market supply dynamic with many agents thinking the next season of new season lambs could be one of the best in recent memory. Expect the lambs to come hard and early at heavier weights than ever witnessed before.

• This will be the same with southern cattle supplies; they will come earlier and at heavier weights than in recent years around August with fodder crops you can almost walk over and very mild conditions ~ new season stock are packing on the weight

 NQ

• Physical market came under a bit of pressure from weight of numbers. Top end of the market held up but the next step below lost 10-15c/kg as processors become more discerning.
• HGP discount has returned with ‘pill’ cattle minus 30c/kg lw. This had all but disappeared when the market was ripping along
• Feedlots were aggressively purchasing cattle and locking away background stocks which is a vote of confidence in the longer-term outlook with major processors obviously concerned about getting cover for future supplies & looking into 2027.
• Good feedlot inquiry for late June and into July, but still no live export interest out of Townsville now, given strength of local feedlot pricing around Townsville.
• Live export job has picked up 20c/kg back to $4 for a Brahman feeder steer with the Rupiah under 18,000 at 17,700 to start the week

CQ & sth QLD

• Season is starting to hay off. We’re looking for rain, but plenty of feed about.
• Sth feedlots very active on the feeder job. $5.25 delivered Moura & Blackhall which makes them $5.40-$5,45 Downs for flatbacks.
• With feeder market so strong, weaners are making closer to $6.
• Heifers have started to get some legs and are narrowing the discount to steers in a signal that some restockers may be entering the market.

 Nth NSW

• Lots of inquiry or demand for that grassfed yearling trade steers they’re sitting north of $10/kg dw
• There are simply not the numbers in Northern New South Wales that normally supply these markets at this time of year
• Angus feeders $6
• The heifer equivalent 400-500kg black heifer, you are looking at $5.40 to $5.50.
• A couple of 100-day quotes for October, certainly are going with the market getting toward the high $9’s/kg dw.
• Southern supplies will probably start to kick in around August/September. Expect supplies to come early this year and the cattle weights to be heavier with the fantastic season being enjoyed across the south
• Seasonally, we’ve had a good turnaround and a fair percentage of the state, but it’ll take time before we see any numbers.

 VIC/Riv

• More rain with some water starting to run into some dams, but it needs to keep raining.
• First heavy frost of the season on Monday which signals end of pasture growth
• This cattle job’s flying, little black steers made nearly $7/kg, somewhere in Gippsland.
• Feeders $5.50 to $5.60 but they are few and far between them.
• There are lightweight calves coming out just purely chasing the money with some big unseasonal numbers at Mortlake and Ballarat. Most of these cattle don’t need to be sold but they’re just taking the money.
• Sheep and lamb jobs flying along, it sort of bounces around from $11-11.50/kg
• Sheep up to $9/kg Ararat.
• But some works are about to go into those shutdown periods that we talked about a couple of weeks ago. Ararat shutdown at the end of this week, and they roll on from there.

 SA

• More rain. Season is as good as we’ve seen for a long time.
• Lamb job is seeing a little bit of money with up to $12/kg for trade weight lambs 18-24kgs, which they need to pay to compete with the store job.
• Most works seem $11 to $11.50/kg dw over the hooks for the short period looking into July.
• Looking for some pricing into August, I think we will see a few contracts roll out because that’s when we are expecting to see supplies squeeze again.
• Mutton at $9/kg means prices have lifted x 10 in under 3yrs. Will this illicit a supply response?
• Waiting for some pricing into that early sucker job, which will come out in the next month.
• Store cattle sale at Dublin Monday was a highlight that included a large draft of cattle from pastoral areas west of Port Augusta that got good support from the SA network. Sales numbers went from 200 to 400 to 800 head over a few days as prices kept rising and sold to strong interest. Restocker steers and heifers $4.80-6.20/kg, restocker heifers $4.40-5.40/kg. Feeders $5-5.70/kg for steers and $4.80-5.50 for feeder heifers. $4/kg for a slaughter bullock and $3.80/kg for a kill heifer.

 TAS

• More rain in Tassie. Looking promising season wise with runoff now filling irrigation dams
• Cattle prices holding well with the store cattle market very solid
• Heifers have been the real big improvers over the last couple of weeks. Can’t get a heifer for under $4.80 now, up another 10-20c/kg on all weights.
• Sheep and lamb markets holding well $11-12/kg for lambs and up to $8/kg for sheep
• Numbers are seasonally tight and we are just making our way to the spring to see how many come to market this year

 WA

• Good rain north of Perth and right through to pastoral areas which is fantastic for all Ag regions across the state.
• On cattle pricing, no changes on slaughter cattle cows $7.40/kg dw over the hook or $3.60 to $3.80 in the yards where people seem to be putting them.
• Heavy bulls, $3.70/kg in the yards, $7.20/kg dw direct to abattoir.
• Everyone’s chasing cattle and the volumes are light seasonally and prices showing no sign of weakness or slowing down. Yearling steers to the paddock from 280 to 380kgs solid at $5.50, topping out just short of $6, Heavy steers 400kgs plus steers are averaging out at $5.20, Heifers 280 to 400kgs also solid at $5.
• Big store sale this Wednesday at Boyanup, just shy of 1500. Light steers 250-300 to a top of $6.12/kg, 300-350 to $5.80/kg , heifers 60c/kg behind

Processor view of the market

I had a discussion with a major southern processor, and he was just back from travelling around QLD. His comments around supply, are that there are plenty of cattle in QLD market back 10-20c/kg last week and if it drops another 20-30c/kg this week it may start to open the floodgates in the next month, assuming no rain issues.

On lamb, people budgeting $11-12/kg this spring, once the new season flush comes coupled with reduced processors capacity lamb prices will come under pressure. There won’t be much mutton, but they are killing 60-70% less and sales are slow at current price levels.

Obviously, this is from a processors perspective but confirms some of my thoughts that bc meat prices haven’t adjusted higher recent price run supply related and once that situation becomes more comfortable as the north starts running harder and spring supplies start to appear in the south prices will adjust lower. I think the catalyst for beef will be when China announces Brazil at 80% and for sheepmeat when new season lamb supplies start to run (a month earlier and much heavier than the last few Springs).

The key message is not to try and squeeze the last $$$ out of this market if clients have stock ready. Supply/demand dynamics are about to change considerably from July/August.